Covid-19 and Russia-Ukraine war: trade impacts on developing and emerging markets

Just as the world appeared to be turning the corner on the COVID-19 pandemic, the Russia-Ukraine conflict erupted, and the global economy may be about to enter new, uncharted territory. Increased geopolitical tensions threaten to dramatically alter the global economy’s recovery prospects. The waning yet still reverberating pandemic has posed an unprecedented challenge to public health on a global scale, unleashing simultaneous global demand and supply shocks, spanning all nodes and centers of economic activity worldwide. With the global economy more interconnected than ever, the rate of cross-economic contagion is likely to take an unparalleled economic toll on all countries, including Tuvalu, that relies on remittances and export receipts. The responses to the COVID-19 and Ukraine-Russia war created 'new normal' require a mix of policy levers and incentives to mitigate the economic impacts on the most disadvantaged households and workers. Further, it is required to avoid measures that constrain economic activity, deepen the economic slowdown, and lengthen post-COVID recovery.